How can you innovate today to shape tomorrow?
Research shows organizations that can demonstrate a higher purpose are in a better position to innovate and take control of their future
As data and digital technology affect every sector, businesses are under tremendous pressure to innovate. “Innovate and disrupt, or suffer disruption,” they are told. This is a huge responsibility for leaders, since innovation starts at the top and is historically difficult to sustain. But their risk of failure goes down and their potential for true impact goes up if they make purpose the guiding light of innovation. Predicting the future is impossible, but when an organization can articulate and activate a higher purpose it has a better opportunity to shape the future of itself and its marketplace.
A report by the Economist Intelligence Unit (EIU) and supported by EY reveals a distinct connection between purpose and innovation. The EIU executive report surveyed 1,000 senior decision-makers from across three global industries to discover how they are responding to disruption.
A 63.4% majority of executives believed that having a sense of purpose and aspiration beyond their day-to-day commercial mission made them a more innovative company and therefore more able to disrupt or respond to disruption.
Why is purpose such a positive driver for innovation?
- Purpose creates a culture that supports innovation. When people understand their organization’s values, they are engaged and inspired to work together to promote those values. So employees who are engaged by a company’s purpose are more motivated and willing to invest their time and energy in developing new ideas. And 71.7% of respondents in our the EIU report felt that their staff were enthusiastic about their company's broader goals.
- Purpose strengthens innovation by focusing on meaningful impact beyond traditional corporate metrics. The prospect of revenue growth or a higher stock price does not resonate with humans in the way that purpose does. Purpose helps people to focus on the “big picture,” encouraging them to think beyond incremental product or service improvements and aim for more ambitious outcomes. One company, a global provider of medical technologies, cites its purpose “to restore people to full life and health” as being the driving reason behind dramatic product innovations.
- Purpose facilitates external collaboration. Great innovations are often the result of alliances that span organizational boundaries. Here, purpose can be the “common denominator” that allows organizations (even competitors, in some cases) to collaborate with each other (and their customers) on new solutions while achieving their common goals. For example, one global consumer products company essentially crowdsources 60% of its R&D pipeline, crediting its purpose of “making sustainable living commonplace” as the catalyst for the success of its open innovation digital platform.
- Purpose enables organizations to think differently so they can act differently. The EIU report asked executives which measures would effectively foster a culture of innovation in their organization. Of the respondents, 32.2% said that setting a sense of purpose from the top would be the most effective way of going about this.
Our disruptive environment has made innovation more of a business imperative than ever before. Placing purpose at the core of your organization’s innovation strategy allows you to focus efforts in the right areas and motivate your team to deliver disruptive results. When you underpin innovation with purpose, you have created a powerful, meaningful context that powers success.
Valerie Keller, global head of the EY Beacon Institute, contributed to this article.